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Costain bullish on 2018 financial targets

Costain has said it is on track to hit its 2018 half-year financial targets as it focuses on more high-tech work.

In a trading update released this morning, the company said it had performed well in the six months to the end of June and that its results would be in line with the board’s expectations.

The firm’s move towards more high-tech work was paying off, according to the update, which cited recent contract wins on Highways England smart motorways programme and the Motorway Incident Detection and Automated Signalling (MIDAS) system.

Costain also recently announced plans to expand to a larger technology centre in Somerset that will house 150 employees.

Chief executive Andrew Wylie said: “The further expansion of our technology capability through this enlarged group-wide facility is another important step towards establishing Costain as the UK’s leading smart infrastructure company.”

Analysts at Liberium said today that Costain “should benefit” from the government’s drive to boost productivity outlined in the industrial strategy in November, as a result of its investment in more high-tech work.

Liberium added that Costain’s efforts to carry out more consultancy work while expanding its technological capabilities should also make it a lower-risk prospect compared with other large contractors.

In May the company appointed Helen Simms as capability director for its consultancy work, with a brief to develop the firm’s engineering and advisory services for key clients.

Costain’s order book at the end of June was unchanged from the same time last year at £3.7bn.

The lack of growth was partly due to the winding down of large projects at London Bridge and on Crossrail, according to Liberium.

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